WVC 11 - 13AA- 3
§11-13AA-3. Definitions.
(a) General. -- When used in this article, or in the
administration of this article, terms defined in subsection (b) of
this section have the meanings ascribed to them by this section,
unless a different meaning is clearly required by either the
context in which the term is used, or by specific definition, in
this article.

(b) Terms defined. --

(1) "Agreement" means any agreement or contractual
relationship entered into after the effective date of this section
between a person developing patents in this state and either:

(A) A corporation established under the laws of this state
that meet the requirements of section three, article twelve,
chapter eighteen-b of this code; or

(B) A center for economic development and technological
advancement created pursuant to section three, article twelve-a,
chapter eighteen-b of this code.

(2) "Business activity" means all activities engaged in or
caused to be engaged in by a person with the object of gain or
economic benefit, direct or indirect. For purposes of this
definition, the term "gain or economic benefit, direct or indirect"
does not include income realized by any person in the form of
wages, salary or income that is reported on federal form W-2.

(3) "Commercial use" means selling, licensing, leasing or
otherwise making patents available to a third party for a price, fee, royalty, commission or other consideration called by whatever
name. "Commercial use" also means, in the case of patents
developed by the developer for the developer's own commercial use,
the first use of the patents in a manufacturing or other business
activity of the developer. "Commercial use" does not include any
selling, licensing, leasing or otherwise making patents available
to a third party when done by a broker or by any person who does
not own the patent sold, licensed, leased or otherwise made
available.

(4) "Commissioner" and "Tax Commissioner" are used
interchangeably herein and mean the Tax Commissioner of the State
of West Virginia or his or her designee.

(5) "Copyright" means a copyright that is registered with the
United States Copyright Office or with a similar office of a
foreign country when the foreign copyright is recognized under
federal law.

(6) "Delegate" in the phrase "or his or her delegate", when
used in reference to the Tax Commissioner, means any officer or
employee of the Tax Department of the Department of Revenue duly
authorized by the Tax Commissioner directly, or indirectly, by one
or more redelegations of authority to perform the functions
mentioned or described in this article.

(7) "Development of a patent," "developing patents" or
"development" means the act of inventing or discovering any new and
useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereto through
significant investment of money, performance of research, or
application of design or engineering expertise, which culminates in
the issuance of a patent, as defined in this article.

(8) "Developer" means a person engaged in this state in
developing patents for direct use in a manufacturing process or
product and who has an agreement, as defined in this section, with
Marshall University or West Virginia University.

(9)"Directly used in manufacturing process or product, "and
"direct use in manufacturing process or product" with reference to
patents means application or incorporation of a patented process,
machine, article of manufacture or composition of matter, in
manufacturing operations or processes, or in manufactured products,
in circumstances where United States or foreign patent laws require
that the specific patent for the process, machine, article of
manufacture or composition of matter be owned by the manufacturer,
or purchased, leased, licensed or authorized by contract to be
applied or incorporated in the manufacturing operation, processes
or product, and where such lawful ownership, purchase, lease,
licensure or contractual authorization is in effect.

(10) "Manufacturing" means any business activity classified as
having a sector identifier, consisting of the first two digits of
the six-digit North American Industry Classification System code
number of thirty-one, thirty-two or thirty-three.

(11) "Mask work" means a series of related images, however
fixed or encoded:

(A) Having or representing the predetermined, three-
dimensional pattern of metallic, insulating or semiconductor
material present or removed from the layers of a semiconductor chip
product; and

(B) In which series the relation of the images to one another
is that each image has the pattern of the surface of one form of
the semiconductor chip product.

(12) "Net profits" means West Virginia taxable income as
determined for purposes of article twenty four of this chapter,
before application of this credit and after application of all
credits allowable under this chapter except this credit. In the
case of taxpayers that are not subject to the tax imposed by
article twenty-four, "net profits" means West Virginia taxable
income as determined for purposes of article twenty-one of this
chapter, before application of this credit and after application of
all credits allowable under this chapter except this credit. In
circumstances where net profit is not solely attributable to and
the exclusive result of the direct use of a patent in a
manufacturing process or product in this state, the taxpayer shall
determine net profit solely attributable to and the exclusive
result of the direct use of a patent in a manufacturing process or
product in this state, and net profit for purposes of determining
the amount of credit allowable under this article shall be the net profit solely attributable to and the exclusive result of the
direct use of a patent in a manufacturing process or product in
this state.

(13) "Owner", when used in reference to a pass-through entity,
means a person who owns an equity interest in the pass-through
entity.

(14) "Partnership" includes a syndicate, group, pool, joint
venture or other unincorporated organization through or by means of
which any business, financial operation or venture is carried on,
which is not a sole proprietorship, trust or estate, and which is
treated as a partnership for federal income tax purposes for the
taxable year.

(15) "Pass-through entity" means a partnership, limited
liability company, small business corporation (S corporation) or
other entity treated as a partnership for federal income tax
purposes for the taxable year.

(16) "Patent" means a United States patent issued pursuant to
35 U.S.C. §101, et seq. or the Patent Cooperation Treaty done at
Washington, on June 19, 1970 and is limited to plant patents,
design patents and patents developed in this state for direct use
in a manufacturing process or product, or both developed for use
and directly used in a manufacturing process or product in this
state. For purposes of this article, patents do not include
copyrights, trademarks, mask works, trade secrets or any
intellectual property that is not a patent.

(17) "Person" includes a natural person, corporation, limited
liability company or partnership. A single member liability
company that is treated as a disregarded entity for federal income
tax purposes is be treated as a disregarded entity for purposes of
this article.

(18) "Purchase" means a transaction under which title to an
item is transferred for consideration, or a license or lease
contract for at least three years is executed, regardless of
whether title to the item is transferred at the end of the lease or
license period.

(19) "Taxpayer" means any person subject to the tax imposed by
article twenty-three or twenty-four of this chapter or to both
taxes. In the case of a sole proprietorship that is not subject to
either the tax imposed by article twenty-three or twenty-four of
this chapter, the term "taxpayer" means a natural person who owns
a disregarded entity and who is subject to the tax imposed by
article twenty-one of this chapter on his or her income from
business activity in this state, or any sole proprietor who is
subject to the tax imposed by article twenty-one of this chapter.

(20) "Trademark" means any trademark, trade name, service mark
or other identifying symbol or name that is registered with the
United States Patent and Trademark Office or with a similar office
of a foreign country when the foreign registration is recognized
under federal law.

(A) Derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means, by other persons who can obtain
economic value from its disclosure or use; and

(B) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
Note: WV Code updated with legislation passed through the 2016 Regular Session
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